I’m leaving this post to be updated whenever it needs. I’m going to put my main errors during Round 1 of my stock trading into this post. This is kinda like watching the video of the boxer's first round to see what he/she did wrong. By doing this, I won’t have to search all over the Stock Trade section of this blog. This shouldn’t take long considering I make the same mistakes over and over again. I’ll list the mistake and then put a specific example of it directly underneath. Let’s get started:
Too Many Trades in a Month
January: 3 trades
February: 2 trades
March: 5 trades
April: 11 trades
May: 12 trades
June: 5 trades
July: 7 trades
This is simply too much. 1 trade a month in a strong stock should be just fine. Jumping from one pattern to the next decreases your ability to make smart decisions.
Removing Alerts and Stops When a Stock Drops
“Alerts allow me to be notified when a stock hits a certain number. This allows me to plan ahead so that, when I get the email stating that a stock hit a certain number, I can assess the situation and determine whether it’s a buy. It also can help with a stock I own. Let’s say I buy ABC stock at $10. I can set multiple alerts combined with my stop that will let me know which way the stock is going.”
This is a very good strategy you wrote about in June, yet you still made the mistake of moving alerts backwards for MUX. You would have lost $500 less had you listened to the alert and sold when you were supposed to.
Listening to the Analysts
Three words: Down, Down, Down. Never learn this lesson again. Analysts are a necessity because they have good facts and data. Keep the facts and data, but block out their opinions. Or would you rather miss out on another $1,500 trade like you did with NFLX and AMZN? Try having some faith in yourself.
Not Holding a Stock Long Enough
You made 45 trades this year for a loss of $4,629. Ready to feel stupid?
You bought 40 shares of TSLA in January at 206.12. It is now at 270.13.
You bought 100 shares of JBLU in January at 14.42. It is now at 23.68.
You bought 900 shares of WWE in March at 16.94. It is now at 23.01.
You bought 100 shares of FB in March at 84.67. It is now at 96.43.
Need something more recent? Okay.
You bought 50 shares of EA in July at 73.66. It is now at 75.16. Guess you were right about that “safety net”.
This is what you would have made if you did just one trade with these stocks right now:
Tesla: $2,560.40, a 25% return on initial investment
JetBlue: $926, a 9% return on initial investment
WWE: $5,463, a 54% return on initial investment
Facebook: $1,176, an 11% return on initial investment.
Electronic Arts: $75, a .007% return on initial investment
You pick a strong company that you believe in. Trade with a comfortable stop and several alerts. That’s all you have to do. One trade. Look at the money you could have made. Are you in pain yet? Does it hurt? Good. Feel that pain. Feel the shame. Own it. If that’s the only way you’re gonna learn this lesson, then here you go. Take it like a man.
That should do it for now. That.... that last one hurt like hell. I'm reading it back right now and that's kinda fucked up. Whew. I’m sure there’s more to come, but these four are the main mistakes I consistently make. When I start simulation trading and apply these lessons consistently, I should see I huge difference.
Too Many Trades in a Month
January: 3 trades
February: 2 trades
March: 5 trades
April: 11 trades
May: 12 trades
June: 5 trades
July: 7 trades
This is simply too much. 1 trade a month in a strong stock should be just fine. Jumping from one pattern to the next decreases your ability to make smart decisions.
Removing Alerts and Stops When a Stock Drops
“Alerts allow me to be notified when a stock hits a certain number. This allows me to plan ahead so that, when I get the email stating that a stock hit a certain number, I can assess the situation and determine whether it’s a buy. It also can help with a stock I own. Let’s say I buy ABC stock at $10. I can set multiple alerts combined with my stop that will let me know which way the stock is going.”
This is a very good strategy you wrote about in June, yet you still made the mistake of moving alerts backwards for MUX. You would have lost $500 less had you listened to the alert and sold when you were supposed to.
Listening to the Analysts
Three words: Down, Down, Down. Never learn this lesson again. Analysts are a necessity because they have good facts and data. Keep the facts and data, but block out their opinions. Or would you rather miss out on another $1,500 trade like you did with NFLX and AMZN? Try having some faith in yourself.
Not Holding a Stock Long Enough
You made 45 trades this year for a loss of $4,629. Ready to feel stupid?
You bought 40 shares of TSLA in January at 206.12. It is now at 270.13.
You bought 100 shares of JBLU in January at 14.42. It is now at 23.68.
You bought 900 shares of WWE in March at 16.94. It is now at 23.01.
You bought 100 shares of FB in March at 84.67. It is now at 96.43.
Need something more recent? Okay.
You bought 50 shares of EA in July at 73.66. It is now at 75.16. Guess you were right about that “safety net”.
This is what you would have made if you did just one trade with these stocks right now:
Tesla: $2,560.40, a 25% return on initial investment
JetBlue: $926, a 9% return on initial investment
WWE: $5,463, a 54% return on initial investment
Facebook: $1,176, an 11% return on initial investment.
Electronic Arts: $75, a .007% return on initial investment
You pick a strong company that you believe in. Trade with a comfortable stop and several alerts. That’s all you have to do. One trade. Look at the money you could have made. Are you in pain yet? Does it hurt? Good. Feel that pain. Feel the shame. Own it. If that’s the only way you’re gonna learn this lesson, then here you go. Take it like a man.
That should do it for now. That.... that last one hurt like hell. I'm reading it back right now and that's kinda fucked up. Whew. I’m sure there’s more to come, but these four are the main mistakes I consistently make. When I start simulation trading and apply these lessons consistently, I should see I huge difference.
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